Name: _______________Keith LeBlanc_ KL953314_____________________________
Week 2 Study Guide: Chapter 2 and
Chapter 7
Instructor’s Note: Please utilize and complete this Study Guide as you read. Viewing the
supplemental PowerPoint for Chapter 2 will be helpful in order to enhance your
understanding of the material. I would strongly recommend using my PowerPoint
presentation for Chapter 7; please use it instead of the book. The questions are listed in the
order in which the material appears in the text. You can type your answers directly into this Study
Guide or type them into a separate Word document. If you would prefer to handwrite it, you may
handwrite it and scan and email your handwritten answers to me. Once you have completed it, I
would encourage you to use it when completing weekly Quiz that covers the week’s material!
Additionally, please email me a copy of your Week 2 Study Guide by 11:59PM on June 7,
2015. The subject line of the email containing your Study Guide MUST read as follows: Your
Name – Business Law – Study Guide Week 2. You will earn 40 points for successful
completion of this week’s Study Guide!
Chapter 2: Ethics and Business Decision-Making
What are ethics? What are business ethics?
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Ethics: satisfying accepted societal standards of moral behavior (do good-not evil,
be truthful, respect rights of others).
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Business Ethics: integrating these accepted societal standards with business
structure and purpose (product or service quality, labor relations).
TRUE or FALSE: Because business ethics is derived from religion, you must be a religious
individual in order to be an ethical individual and ethical business leader.
False. Concepts related to ethical behavior are rooted both in religious historical beliefs
and philosophy, evolving through the ages. More recently, the concept of “corporate social
responsibility” as part of ethical conduct has emerged, adding to the complex decisions by
corporate management where ethics are involved.
Please name three bad things that would not have happened if the individuals on Page 45 had acted
ethically:
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Horrible accidents (Bopal, BP Gulf, coal mines) and/or the potential for long-term
health problems would not be as prevalent.
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Viable corporations would not have faced bankruptcy due to business losses and
settlements related to violations (Wall Street collapse).
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Employees and pensioners would not have faced serious financial problems due to
unexpected collapse of the enterprise (Enron, Arthur Andersen).
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In some cases, society at large would not have suffered dislocation of vital services,
availability of certain worthwhile products, and the public costs of dealing with the fallout
from ethical lapses.
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What is the “moral minimum” with regards to ethics?
A belief (or at least a business position) that the “moral minimum” is satisfied by complying
with existing applicable laws. All too common in modern world.
TRUE or FALSE: Just because an action is legal does not necessarily make it ethical.
True. Coded laws cannot anticipate nor regulate the variety of decisions made in business
every day. Excesses in the awarding of compensation to executives/owners is one very
well-known violation; ignoring known but not yet regulated potential environmental
impacts is another.
What is an example of a business action that is legal but that is not necessarily ethical?
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Being responsible for unhealthy/dangerous working conditions that are not
improved because local laws do not demand that changes be made. Too many examples to
consider, both foreign and domestic.
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Holding down worker wages and benefits in less developed/emerging nations.
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Using offshore corporate identities and policies to materially reduce or indefinitely
defer business and other taxes that would otherwise be paid to the corporate home nation.
A common practice that has yet to be dealt with effectively by US authorities.
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Outsourcing of home jobs to much lower paid replacements in foreign countries
primarily to increase corporate profits.
What do some people say that the only goal of a business should be?
To operate profitably, and reward management and shareholders with compensation from
those profits.
What is the most common reason why ethical problems occur in business?
Modern global finance pushes corporations to maximize short-run profits (and thus
perceived business value), devaluing known or potential longer-term cost (to the business
and/or society at large). This environment plus the use of stock options for compensation
induces “raising stock value” thinking at all management and director levels.
Please do not read the “Costco Code of Ethics” insert in your textbook – we will return to this later
in the Study Guide.
What is a business’s defense when dealing with “grey areas” in the law?
The most successful legal defense is to be able to characterize business actions as
“reasonable and responsible” in the context of existing laws and circumstances. This is not
a guarantee of freedom from public charges of unethical conduct and the huge financial
costs of improving public relations. The coal mining industry in the US (numerous major
accidents in “legal” facilities but with known safety problems) is a very good example.
Exxon in Alaska and BP in the Louisiana tidelands, General Motors in the faulty ignition
switch tragedy -- are other major cases where simply meeting the laws was potentially
insufficient to guarantee environmental safety – and the companies knew it.
TRUE or FALSE: Simply promoting ethical conduct is sufficient to build an ethical culture within a
workplace.
False.
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The promoted code of conduct must be actively and visibly followed by management
in business decisions and all internal and external business operations.
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The rules of conduct must be enforced evenly among management and all
employees.
What can top management do in order to create, promote, and maintain an ethical workplace?
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Demonstrate ethical conduct and a belief in business ethics at the highest level of
management.
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Educate all business managers and employees in the principles of business ethics as
these will be applied to business operations. Do not permit (and certainly do not encourage
!!!) middle managers and below to ignore ethics in producing an advantage for the company
(safety, sales, service, customer relations).
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Adopt a “Code of Conduct” for management and employees of the company
responsive to a balance between profitable operation and social responsibility.
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Enforce evenly the rules set forth in such a Code, and apply sanctions to anyone
making decisions or taking actions that violate the Code.
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Make room for whistleblowers in the corporation’s oversight of ethical issues.
Eliminate fear of retaliation or other rights violations for whistleblowers with legitimate
concerns.
What are some ways in which an unethical culture can be created within a company?
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Management demonstrating an unsupportive attitude about ethic business practices.
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None available or only a poorly produced ethics code for guidance.
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Emphasis on “results” (production, sales, pricing, service) that are not realistic if
business ethics behavior is to be “promoted”.
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Retaliation against whistleblowers or others attempting to point up violations of
general or specific applications of ethics.
What is the effect of creating a well-written code of ethics?
It is at least two-fold: first, it shows that management is serious about developing a serious
ethics code related to company operations, it expresses definitions, priorities and potential
violations of the company’s stated commitment to ethics, finally, it offers some protection to
the business in terms of defending against as yet unknown claims of incorrect behavior.
After you have read the two paragraphs under the heading “Creating Ethical Codes of Conduct”,
please turn back to the fold-out “Costco Code of Ethics” insert that is in your textbook between
Pages 46-47. This is an example of a real-life code of ethics that is created and distributed in the 21st
Century business marketplace. Please use this document to answer the next few questions.
Please list at least 3 ways in which Costco shows that they “Obey the Law”:
From the Code of Ethics:
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Comply with all statutes, including safety regulations.
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Comply with all business disclosure and reporting requirements.
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Comply with all wage and hour laws.
Please list at least 3 ways in which Costco shows that they “Take Care of Our Members”:
From the Code of ethics:
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Provide a safe shopping environment.
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Offer only quality products and at the most competitive prices.
Directly monitor product health and safety standards.
Please list at least 3 ways in which Costco shows that they “Take Care of Our Employees”:
From the Code of Ethics:
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Promote from within and maintain notably high percentage of management from
already existing employees.
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Maintain a safe working environment, including reasonable hours of operation.
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Pay fair wages and benefits.
Please list at least 3 ways in which Costco shows that they “Respect Our Vendors”:
From the Code of Ethics:
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Honor all commitments based on fair business negotiations.
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Maintain acceptable business financial arrangements.
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Accept no gratuities from vendors.
Please list at least 5 of the consequences that are detailed on the Code of Ethics that can result if
Costco engages in unethical and\or illegal conduct:
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Discrimination, intimidation, harassment in the workplace can result in costly legal
judgments against the company.
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Not honoring commitments to vendors can expose the company to breach of
contract lawsuits and settlements, as well as a loss of desirable suppliers.
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Violation of safety standards can result in government agency sanctions (OSHA
based) as well as employee and customer legal actions unfavorable to the company.
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Disclosure of “trade secrets” (insider information) can result in legal action against
the person(s) responsible and damage the company’s reputation.
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Accepting any gratuities from a vendor can expose the employees to prosecution for
bribery and expose the company to US or foreign civil penalties.
Please return to Page 49 and begin with the section titled “Providing Ethics Training to Employees”.
What are some practical steps that can be taken in order to implement a well-written code of ethics?
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Continuously provide management and employees conduct training based on ethical
practices and the company’s adopted code and related guidelines.
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Involve management and employees in face-to-face discussions of various types to
discuss the business code of ethics and any perceived or potential problems.
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Examine business practices of related operations (subsidiaries, suppliers, etc.) to
determine if similar reasonable business ethics are being respected.
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Terminate relationships at all levels of the business (management, labor, suppliers,
financiers) where violations of the corporate ethics code are continuous.
What is the purpose of the Sarbanes-Oxley Act?
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To strengthen the regulatory environment for the accountability of corporations.
The “accountability” aspect includes a variety of much improved internal controls and the
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provision of public reports of financial results. Certification of the accuracy of accounting
documents by top management is a major new aspect.
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To create a new office of “public accounting oversight” (PAOB) to independently
review the policies and results of audit and related business accounting procedures.
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To provide protection for “whistleblowers” who report violations of laws governed by
the Securities Exchange Act of 1934, as amended by this and previous or anticipated
additions.
In what circumstances can a stock buyback be unethical?
A corporate buyback is unethical when the company is using corporate cash or debt to
artificially increase stock value via a market buyback, and when the principal reason is to
permit stock option holders to potentially receive a windfall profit from an increased stock
market price.
What was unethical about the way in which taxpayer-provided “bailout money” was used by
companies such as AIG and Lehman Brothers?
These companies claimed public funds were needed to stave off bankruptcy, extensive
negative employment impacts and dramatic turmoil in financial markets – and then when
the public funds were provided in an emergency environment, the funds were used to shore
up executive direct and option compensation and benefits. Compensation to key
executives of some financial services firms during this period have since been exposed as
flagrantly excessive.
What is ethical reasoning?
The application of personal ethical standards or beliefs to a given situation where ethics
may be significant in outcome.
Please describe the two general approaches that can be taken with regards to ethical reasoning in the
business context.
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Duty-based Ethics: ethical beliefs or standards based upon historical religious
teaching (start with the Ten Commandments) or philosophical reasoning (Kantian theory
that calls for any ethical decision to be made assuming all people make the same choice);
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Outcome-based Ethics: known also as the “Utilitarian model” this approach
defines, quantifies and evaluates decisions in terms of achieving the greatest net positive
impact for the largest number of people. An evaluation of whether or not to have
mandatory vaccination of elementary school children would weigh expected protection from
disease against potential negative side effects. Complications include accounting for local
environments, family life, time, etc. But this basis is commonly used in the United States
today.
TRUE or FALSE: Duty-based ethics only come from religious texts.
False. The concept of ethical reasoning is based upon evolved philosophical thinking
(Kantian Philosophy) as well as religious thought and teachings (foundation being the Ten
Commandments and other such principles).
What does an individual who ascribes to the Principle of Rights look at and consider when
evaluating a business decision?
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The balance between positive and negative impacts of the decision on the rights of others
involved. For example: the rights of persons to have a rewarding life without undue
influence from others. The rights of communities to have a safe supply of potable water.
Please paraphrase the idea of utilitarianism.
This concept of ethics reasoning looks for a decision that produces the most positive
outcome (as defined) for the largest number of people.
Example: maintaining or improving sanitation levels for processed food products versus
market pricing to support a needed sales volume – in a chicken processing plant, for
instance. Question: invest in costly sanitation measures (large societal impact) and
increase prices of product (possible decrease of sales and profit at company level – impact
on shareholders)? A Principle of Rights-based decision would select the important
improvements in product safety and accept the negative monetary impacts on the relatively
small management and shareholder population.
What is Corporate Social Responsibility?
Taken together, a number of theories that corporations should operate in an ethical setting
and be responsible and accountable to society as well as shareholders. These theories hold
corporations to a much higher standard than typical profit and return on capital measures.
Very significant pressures are now on private business at every level to maximize the “do
good – no evil” approach to the company’s position in society.
Please describe the two ways through which Corporate Social Responsibility can be exhibited in the
modern business world.
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Using operating models that minimize overall and local employment losses when
markets shift. Companies such as Dell, Cisco, Motorola and Honda have used various
approaches that have minimized these cyclical situations.
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Using corporate assets to enhance worthy community social activities (through
money donations or through gratis provision of company employees to assist); and using
larger business influence to encourage induce smaller firms to follow in such practices.
When is corporate responsibility most successful?
The best examples appear to involve situations when business can take on an expanded
beneficial social role and simultaneously enhance its own operations. Providing leadership
and financing environmental protection of natural resources is an obvious area. Supporting
general and specific vocational education nationally and locally is another.
What is one business-related advantage of practicing corporate social responsibility?
Positive public relations pointing up ethical behavior, community support, honest labor
relations and the like will elevate that organization in the marketplace in terms of respect
and trust.
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Please list the six guidelines that employees should consider when evaluating if their decisions are
ethical. Please consider how you would apply these to a hypothetical scenario as well.
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Is a proposed decision/action legal? The employee is required to know the law,
find out what is involved, and act accordingly. Ignorance is no defense.
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Are you following adopted internal guidelines and controls? Terminate or modify
any conduct that is not in conformance.
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Keep your conduct in line with the company’s stated ethical code; do not attempt to
circumvent the promoted code to produce a personal or company advantage.
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Look at your conduct as if it were exposed publicly. Would it pass internal and
public scrutiny in the sense of conscientious behavior?
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Keep your business dealings with others honest, and maintain an environment of
trusted agreements (contracts, compensation, etc.) with all outside your company’s walls.
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Act in the model of someone you hold well above others in terms of effective and
ethical employee/management behavior.
Please list the five steps that Leonard Bucklin believes should be followed in order to ensure that a
business decision is ethical. Please consider how you would apply these to a hypothetical scenario in
the future.
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Inquiry: basically fact-finding and identification of ethical issues as identified and
understood by parties of interests.
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Discussion: corporate management evaluates potential actions.
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Decision: agreement by involved management on an optimal course of action.
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Justification: analysis of the selected course(s) of action in the context of perceived
ethical issues and corporate operational requirements.
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Evaluation: will adoption of a course of action provide maximum resolution of the
ethical issues taking into account all parties involved?
Scenario:
Corporation XX has purchased and maintains a critical vehicle repair and maintenance
facility, where continuous environmental testing now indicates residual groundwater quality
impact from materials previously used in the corporate facility. Inquiry will identify extent
of the problem as newly discovered, parties potentially involved in a regulatory sense, local
impacts on water supply and quality, public relations impact; potential costs of full
remediation. Corporation has previously taken recommended steps to control pollution
and is in compliance with all legal permits. Discussion will provide for an airing of all
issues and better understanding of the extent of the problem, details of full solutions as
proposed and the corporation’s actions to date. Decision will involve management’s look at
options in the context of possible satisfaction of perceived ethics issues as well as technical
and the costs and benefits of action alternatives. Justification will involve an internal
management “testing” of proposed actions internally (ethics code and operating
considerations) for what appears to be the best case option. Evaluation will subject the
proposed corporation responses to analysis in terms of best satisfying the governance,
regulatory, public image, public economic and environmental benefit issues involved.
What are two ways in which American businesses run into ethical problems when dealing with other
countries?
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Dealing with cultural and social differences in the foreign environment, such as the
societal roles of men and women, and observable personal conduct.
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Working with workplace standards (safety, health, fair wage and other labor
practices) that may differ significantly from US standards.
What does the Foreign Corrupt Practices Act prohibit?
Personal payments (bribes) to foreign government officials to secure advantageous
contracts.
Please open the supplemental Week 2 PowerPoint on ethics that is posted on Blackboard. This
PowerPoint was created to summarize, recap, and supplement the material presented in the
textbook. Please use the information on this PowerPoint to answer the remainder of the questions
for this chapter on this Study Guide.
TRUE or FALSE: Unethical conduct in the business world is a phenomenon that is limited to the
late 20th Century and the 21st Century.
False. Watch any TV documentary on building pyramids and other megastructures in
ancient history, and think about the millions of lives sacrificed to ruler notions of national
status and rights of those in control (the “businesses” of the age). Take this concept to the
industrial revolution and you have the routine shameful exploitation of workers (men,
women and children) by business. Building of the railroads across the USA. Add business
support for various wars (to profit from supplying war) through the ages. Documentation
is very easy, evidence abounds.
What are some of the arguments in favor of corporate social responsibility?
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The futures of business in a given society are entwined with the society as a whole.
Solid corporate social responsibility will contribute to stability and satisfaction.
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There are marketing advantages to a demonstrated social responsibility by
corporations – and disadvantages to a reputation opposite that position.
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There are operating advantages in terms of labor stability and production when
social responsibility is part of the business ethics posture.
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High levels of corporate social responsibility assist communities to deal with societal
problems and to identify the business as one concerned with the future.
What are some of the arguments against corporate social responsibility? (I realize that some of you
may not be familiar with the idea of a publicly held corporation or a publicly held company. The vast
majority of large for-profit companies in America—such as Wal-Mart, Target, Google, Microsoft,
etc—are “publicly held” companies. Anyone can buy an ownership interest in a “publicly held”
company by purchasing shares of stock in the company. Most people buy stocks in a company
because they believe that the value of the company’s shares will increase in the future as the
company’s performance improves and that they will be able to make a profit and achieve a good
return on their investment by selling their shares when they are worth more in the future. This
means that places such as Target are owned by shareholders, not by the founders or by the
executives. Consequently, all of the assets of the company are owned by shareholders. Please contact
me via e-mail or post a message on the Discussion Board if you would like additional explanation or
clarification about the definition of a publicly held company.)
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Diverting corporate funds (which of course include shareholder investments) to
“social issues” is not appropriate for publicly owned business. This is government’s role.
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Taxation of business already takes funds later applied to “social issues” that could
be used to improve business output and profits.
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Maintaining a sound and ethical business operation that provides stable fair wage
employment is a sufficient contribution of the corporation to society.
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Adding “social responsibility” to the operating global business complicates the roles
of management and exposes the business to a less advantageous position in very
competitive global markets.
Please list and summarize some of the practical ways in which corporate social responsibility can
help a business increase their profits:
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Greater exposure as a “socially aware” business can provide advantages in dealing
with regulatory bodies. A huge consideration.
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Working to create a stable labor environment can reduce friction, improve
production, reduce or eliminate work stoppage. Merging corporate operating goals with
local community economic development can put additional pressure on labor to negotiate
fairly and with understanding.
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Business facilities proposed for environmentally conscious states, towns and cities
will more likely be seen as acceptable – and less costly to implement -- if the company has
demonstrated a willingness to take the high road to environmental protection.
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Attraction of highly skilled technicians and managers is often easier if the business
puts forth a socially responsible profile. This can both reduce costs due to wages paid,
turnover, and provide competitive advantages due to a more productive workforce.
Chapter 7 – Contracts (Nature, Classification, etc)
While our textbook is very good in many respects, I found the materials on contract law to be very
confusing, poorly organized, and full of extraneous material.
Because of this, I decided to go through the chapters myself, reorganize the material into a logical
manner, and create a PowerPoint slideshow that draws upon material from my other classes in order
to create a cohesive and logically flowing presentation of the material that we need to cover. The
good news is that this makes your reading load for the next two weeks much easier! The Study
Guide corresponds with the order of the material in the slideshow.
Essentially, you'll want to view the PowerPoint and answer the Study Guide questions as you go. As
you answer the questions on the Study Guide, please refrain from cutting-and-pasting the
material directly from the slides onto the PowerPoint. Please put the material into your own
words. I know that this may take a bit longer to do, but you will be grateful that you did this in the
future because doing so will facilitate long-term understanding and retention of the material!
You'll use this PowerPoint for Weeks 2 and 3. Of course, you are welcome and encouraged to
use this PowerPoint on your Quizzes during Weeks 2 and 3.
Please remember that this material is complex, so please don't hesitate to let me know if
you have any questions!
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What is a contract?
A set of promises that gives two parties a legal duty to each other, as well as the right to a
remedy in the event of a breach of contract.
In your own words, please list and describe the three purposes of contract law in American society:
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People naturally focus on their own interests first, and contract law prevents any
party from being taken advantage of with no way to remedy.
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It allows businesses and commerce to develop with enforceable agreements and
promotes marketplace stability.
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It permits the settlement of disputes in a controlled lawful manner, avoiding the
undesirable in terms of “settlement” of disputes.
Which types of contracts are governed by the Uniform Commercial Code?
Tangible items, such as consumer goods that one can see, touch and move (as opposed to
“paper” -- securities or financial investments, and “real property” – land and
improvements).
Which types of contracts are governed by common law?
All contracts that do not involve tangible goods.
What is a bilateral contract?
A promise from one party (I will deliver the refrigerator) based on the promise of another
party (and for that you agree to pay me $700); involves the accepted exchange of
promises/agreements as consideration between the parties.
What is a unilateral contract?
A promise from one party (I will pay you $400 to change my snow tires) is dependent on an
action taken by another party (actual changing of the tires); execution of the action
represents the second party’s acceptance of the offer.
What are the five requirements that MUST be met in order for a valid contract to exist?
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The offer
Acceptance of the offer
Consideration must be offered
Mutual capacity to execute the agreement
The legality of the contract
What is an offer?
A proposal made by one party to another with the intention of it being legally binding if the
proposal is accepted.
What role is played by the offeror?
The person that initiates the contract by making an offer that meets the five requirements
noted.
What role is played by the offeree?
The person receiving the offer.
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In your own words, please list and describe the three requirements that need to be satisfied for an
offer to be a valid offer:
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The offeror must be capable and willing to meet the contract terms if the offer is
accepted (if I offer to sell you my child’s blue and white scooter, we must own that scooter,
and my wife and children will knowingly permit me to sell it to you).
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The terms of the offer must be specific and well defined ($50 in discount gasoline
coupons, for the subject blue and white scooter, paid on delivery in decent shape, both
wheels working); ambiguity will reduce the validity of the offer (“a scooter”, etc.).
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The person in the role of offeree must have actually received the offer (in writing or
verbally).
In your own words, please list and describe three types of communications that are NOT offers:
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“Offers” that cannot be characterized as serious – in context.
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The offer is vague, non-specific; the proposed contract does not meet the five
requirements for a valid contract.
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Statements that are just opinion (you should buy my wife’s Humvee) or vague in
timing or content (one day I might have to sell you my wife’s Humvee).
In your own words, please list and describe three situations in which an offer CANNOT be
revoked:
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When the offer has already been accepted by the offeree.
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When an “option” contract has been accepted that promises -- for consideration
(from offeree) -- not to revoke the offer for a stated period of time (i.e. this offer is open as
made for 15 full calendar days; $4000 for this option).
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When an offer for a unilateral contract has been made, and offeree has at least
initiated consideration (delivery of bricks for patio, lawn mowing).
When does an offeror’s revocation become effective?
Only when the offeree actually receives provable notice from the offeror that the offer has
been revoked.
What is acceptance?
Demonstration of intent and willingness of offeree to accept the original offer terms, timing,
required consideration, etc. Typically signing documents that contain the proposed
contract provisions, providing required consideration.
In your own words, please list and describe the three things that a court examines when determining
whether acceptance has taken place:
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Is it clear that the person making the offer had real intentions of entering a contract?
Is it clear that the offeree accepted the offer?
Is it evident that the offeror received notice of acceptance from the offeree?
What happens if an offeree’s acceptance contains different terms than the terms of an offeror’s
offer?
Such an acceptance presenting different than original terms voids the original offer and
would be considered a counter offer; this now open to the original offeror’s acceptance.
In your own words, please describe the Mirror Image Rule.
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The terms and conditions agreed to by the offeree must be identical to the terms and
conditions contained in the original offer.
In your own words, please explain when an acceptance becomes valid:
The moment the offeree notifies the offeror of acceptance. Technology has opened the
door to varying methods of this communication (special delivery, regular mail, digital
transmission, telecomm); all are still under the “mailbox rule”. This sets the date and time
of the offeree’s acceptance to that effective in the act of communication (drop letter in
mailbox, send email message) – not the actual receipt by the offeror.
What is consideration?
Money, goods, services, performance of an action promised; something of value offered in
exchange for an action or a promise.
In your own words, please list and describe the three things that do NOT constitute valid
consideration:
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Anything so represented that does not actually require an action by the offeror or
offeree; vague language that does not relate to anything measureable.
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Promise of action already required by the party involved; “preexisting duty” through
another contract that would restrain a party from providing the subject consideration.
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Proposed consideration consisting of past actions, or items of value provided, since
these do not relate to the current proposed agreement, and do not satisfy the definition.
TRUE\FALSE: Consideration is needed in every circumstance in order for a valid, legal contract to
be formed.
False. It is not required in needed in cases involving “promissory estoppel”. This theory
holds that an offeree’s reliance on the offeror’s proposal then creates the contract.,
enforceable without prior consideration. It requires provable evidence that the offeree did
in fact exhibit reasonable reliance on the offeror’s ability to execute.
What is the name of the theory that is used by courts to say that a legally binding contract actually
was created between two parties when an offeree relies on an offeror’s communication and the
offeree’s reliance was foreseeable?
Promissory estoppel theory.
Example: Homeowner has the option to complete a new room addition with or without his
dream of a custom audio visual installation. It is considerably cost effective to do the A/V
work as the room is constructed. DudeXYZ is an A/V “consultant/contractor” and makes
a verbal promise to the homeowner on a site visit to complete the A/V plan and actual
installation prior to certain construction deadlines. Homeowner, DudeXYZ and the room
building contractor discuss timing. DudeXYZ then takes a trip to Thailand, disappearing
for 2 months. The homeowner reluctantly moves ahead with the scheduled room
construction sans A/V installation, knowing he faces $$$$$ in the future to realize his true
improvement dream. “Promissory estoppel” is a possible avenue for remedy from
DudeXYZ.
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